Sporeformers are widespread in the farm environment and are commonly transmitted to milk. They comprise a diverse group of microorganisms with a differential ability to grow at low temperatures, tolerate oxygen, and produce toxins. Some of these characteristics vary widely among bacterial strains from 2 common genera isolated from milk – Bacillus and Paenibacillus. It is critical to identify genetic markers predictive of whether or not these isolates will be able to grow at low temperatures, spoil food or cause the disease. Bacillus and Paenibacillus isolates are extremely challenging to identify and characterize in this manner using traditional microbiological methods. We have therefore employed whole genome sequencing to characterize isolates from dairy foods and dairy-associated environments. Detailed exploration of the diversity of these dairy sporeformers has led to the discovery of a new psychrotolerant and pathogenic species, Bacillus wiedmannii, and several putative new species of Paenibacillus. We have shown that using sequence/phylogeny-based approaches for the identification of sporeformers increases accuracy of species identification, and that certain species of B. cereus group are more likely to grow at cold temperatures and thereby potentially spoil food. Importantly, genomic analyses coupled with cytotoxicity evaluated in a HeLa cell model revealed that presence of diarrheal toxin genes is not sufficient to cause cytotoxic effects. Some B. weihenstephanensis strains carried diarrheal toxin genes and grown at human body temperature (37°C) failed to produce cytotoxic effects on HeLa cells, but were cytotoxic at lower temperatures. Tested B. thuringiensis, known for production of insecticidal crystal proteins, were able to produce diarrheal enterotoxin hemolysin BL. Select strains of B. toyonensis that have been used as a probiotic feed additive, produced hemolysin BL and were cytotoxic in the tissue culture model. We have integrated this information into a whole genome sequence-based B. cereus group characterization tool, BTyper, that identifies microbial species based on the phylogenetic group and identifies known virulence and antimicrobial resistance genes.